Mention reasons for dishonouring cheques: RBI to banks

The Reserve Bank of India (RBI) today directed banks to clearly mention the reason for dihonouring or returning a cheque unpaid.

"Certain instances of banks not signing the cheque return memos stating that the memos are computer generated and therefore no signature is necessary, have been brought to our notice," the RBI said in a statement.

Such practices are violation of instructions contained in Uniform Regulations and Rules for Bankers' Clearing Houses (URRBCH) which is issued under Payment and Settlement Systems Act 2007 read with Payment and Settlement Systems Regulations 2008, it said.

Mentioning the date of return in the cheque return memo is needed, wherein citing the criticality of the document in case of recourse to legal action, the central bank said in a statement.

It has been indicated that instruments returned unpaid should have a signed or initialled objection slip on which a definite and valid reason for refusing payment must be stated, it said.

Source: Business Standard